Revised: Embattled city backed receiver was replaced at Empyrean Towers

Revised: Embattled city backed receiver was replaced at Empyrean Towers

By Lynda Carson - November 18, 2015

Oakland - The troubles at the 96 unit residential hotel known as Empyrean Towers (formerly Hotel Menlo) have not ended, and embattled city backed receiver, Mark Adams, of the California Receivership Group, was replaced after tenants complained to city officials that the majority of repairs needed at the residential hotel, have not been completed.

However, City Attorney Richard Illgen said that Mark Adams was replaced by Randy Sugarman, a Chapter 11 trustee, because the property went into bankruptcy. See comments by City Attorney Richard Illgen further below.

The Empyrean Towers located at 344 13th St., Oakland, and it’s owner Alice Tse, were sued by the Oakland City Attorney’s Office during April of 2015, due to a lack of repairs at the building involving plumbing and electrical problems, an elevator that was out of service, broken windows, and other poor conditions at the building. Additionally the suit charged that Empyrean Towers, LLC, was creating a public nuisance as a direct result of not making the needed repairs, and management was also accused of conducting illegal evictions. The residential hotel was also placed into receivership.

It was on June 26, 2015, that Mark Adams was appointed by Judge George Hernandez to be the receiver for Empyrean Towers. Last week Mark Adams was replaced by Randy Sugarman, of Sugarman & Company, LLP., by Judge Roger L. Efremsky, as a Chapter 11 trustee for the property.

According to residents Don Fisher, and Maria Anast, Mark Adams of the California Receivership Group, had some of the repairs made at the residential hotel since taking it over. But they also believe that he has taken hundreds of thousands of dollars to pay himself, his affiliates, and others working for him, instead of using the money for the majority of the repairs that still need to be done at Empyrean Towers.

Don Fisher and Maria Anast said: “Mark Adams and the California Receivership Group received $250,000 that was supposed to be used for repairs, and for the operation of the building. Repairs that need to be done are still a big issue here. The elevator still does not work, the roof leaks, there are plumbing problems, and electrical problems are causing the lights to go out at times. The heat finally started running in this building on Monday, November 16, 2015, because Randy Sugarman, the new property receiver, hired someone to fix the boiler. This is something that Mark Adams failed to do. Mark Adams has been using the $250,000 and equity that was built up at Empyrean Towers to enrich himself, while ignoring many of the repair problems that have still not been resolved since the property went into receivership. We believe that much of the $250,000 that was supposed to be used for repairs, went into the pocket of Mark Adams, and his company, instead of being used to fix up the building.”

“Making matters worse, the city turned against us and became angry when the tenants in this building complained to city officials that most of the repairs were not being made by the city backed receiver, Mark Adams. They wanted us to keep our mouths shut about the situation, and they wanted to keep Mark Adams in place as receiver, even though they knew that most of the repairs were not being completed, and that the money was disappearing fast.”

“Now, because he is angry at the tenants for not supporting the city backed receiver Mark Adams, Supervising Deputy City Attorney, Richard Illgen, does not want to appear at a soon-to-be mediation with all parties involved.”

“The new receiver, Randy Sugarman, wants to sell Empyrean Towers to a for profit developer, which is not in the best interests of the existing residents. We want City Attorney Richard Illgen to support the tenants here, and want him to push for a nonprofit housing developer to take control of the building,” said Don Fisher and Maria Anast.

According to sources: “It is a mediation involving bankruptcy and a class action law suit, against the Empyrean Towers. If City Attorney Richard Illgen fails to appear at the mediation to urge that Empyrean Towers should be sold to a local nonprofit affordable housing developer, the tenants may all be forced out of their housing soon due to high rents, or a new owner.”

Residents Don Fisher and Maria Anast, along with the Eviction Defense Center, have helped to organize the tenants at the residential hotel in the struggle for better conditions, and to fight back against illegal evictions that were taking place.

Tenants presently reside in around 50 units, of the 96 unit residential building, with many that are poor, elderly, and disabled. Presently, the tenants are viewed as an inconvenience by city officials, because they voiced their concerns about the lack of repairs at the building since Mark Adams was appointed as the receiver, according to sources.

Douglas N. Akay, was an attorney for Alice Tse at Empyrean Towers, and said: “In my opinion, I do not believe that Mark Adams was a good fit for Empyrean Towers. His compliance plan for the building, was inadequate according to a contractor. He was all about the money grab. There were a lot of good tenants at the building that Adams took advantage of. His monthly reporting reports were always inadequate, and he was always bending the rules. He was not disclosing what he should have, most of the time. The city tried to do good, and get the building up to code, but they lost control. Adams was not the right person for the job. He was not above board with anyone, including the court. I am glad that he was replaced. Adams was all about making money. He always put himself first, instead of the tenants. The problem with the heat should have been dealt with long ago, and Randy Sugarman was the one who got the heat going. I think that Randy Sugarman will get things done.”

In defense of Mark Adams, City Attorney Richard Illgen said: “Because the property landed in bankruptcy court, the court appointed a trustee named Randy Sugarman, to take control of Empyrean Towers as a Chapter 11 trustee. The trustee has broader discretion than a receiver has. The city has worked with Mark Adams before, and his rates are comparable to other receivers. Bankruptcy papers were filed in court a month after Mark Adams was appointed as a receiver, and it really complicated matters, and made everything much more expensive in regards to resolving the issues. We wanted to have all the repairs made at Empyrean Towers, and believed that it would take around $500,000 but the bankruptcy kept us from getting the money needed for repairs. The property was not funded properly to make all the repairs that were needed because it went into bankruptcy. Mark Adams even spent some of his own money to make repairs, but I do not know how much.”

When I asked why the elevator does not work, and why the boiler was not repaired till Randy Sugarman took control of the property, City Attorney Richard Illgen still defended the activities of Mark Adams in regards to how $250,000 was spent by the receiver.

City Attorney Richard Illgen did not know when the elevator would be repaired, and said that he did not know what the date was for the mediation that is taking place regarding Empyrean Towers.

The California Receiver Group

Court documents reveal that Mark Adams was charging a whopping $350.00 per hour for his activities as the receiver. Documents also reveal that Gerard Keena, a field agent for the California Receivership Group (CRG), was charging $250.00 per hour for his activities associated with the day-to-day operations at the Empyrean Towers. Andrew Adams, general counsel of CRG was charging $250.00 an hour for his services, and Tyler Huxtable, a para legal for CRG was charging $100.00 an hour for his services.

Click below for more about the California Receiver Group…

http://calreceivers.com/our-team/

Public records with the Secretary of State also revealed that the status of the California Receivership Group, LLC, was SUSPENDED at the time Mark Adams was appointed as the receiver for Empyrean Towers, by Judge George Hernandez on June 26, 2015.

Records further reveal that the California Receivership Group, Inc., was incorporated on July 6, 2015, which is after Mark Adams was appointed as the receiver for Empyrean Towers, on June 26, 2015.

Attorney Douglas N. Akay said: “Mark Adams stated that he had to let the California Receivership Group, LLC, become suspended before he could incorporate as the California Receivership Group, Inc.”

Mark Adams of the California Receivership Group, did not respond to my request for an interview regarding this story.

The question people are asking is whether Mark Adams actually improved the health and safety of the building in regards to the specific task he was given by the state court judge on June 26, 2015. All evidence, including the statements by the tenants at the building, indicate that Mark Adams had very few repairs completed after his appointment, according to sources.

The Empyrean Towers located downtown Oakland at 344 13th Street used to be known as the Hotel Menlo and was then owned by wealthy millionaire Tiburon resident Richard Singer. Singer landed in prison a few years ago after getting caught by the FBI in a sting operation for trying to hire an arsonist to burn down the occupied hotel as part of an insurance scam.

During August of 2011, Singer was sentenced to 27 months in prison, was fined $60,000 and received three years probation after his release from prison for the attempted arson scam. It was an employee of Singer named Samuel Manning who worked with the FBI in a sting operation to nail Singer for the arson scam, after Manning faced charges for embezzling the Girl Scouts out of more than $50,000. Manning sought reduced charges against himself in return for helping the feds go after Singer for the arson scam.

According to records, it appears that Richard Singer transferred ownership of the Empyrean Towers to Alice Tse, on March 11, 2011, shortly after his arrest by the FBI during January 2011.

The Empyrean Towers, is a seven story 96 unit residential hotel built in 1914, and according to Loopnet.com, it has 36 units with a sink, shower, and toilet. There are 48 units that only have a sink, and 12 units that have a sink and shower. Additionally, the property also has three retail units on the first floor.

Lynda Carson may be reached at tenantsrule [at] yahoo.com


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